Citigroup (NYSE:C) is selling its onshore consumer wealth portfolio in China to HSBC Bank China, a move that marks a significant step in the global strategy refresh the bank announced in April 2021. Under the leadership of Christine Lam, Citi Group is exiting from consumer banking across 14 markets, including China. The deal, valued at around $3.6 billion, is expected to conclude by the first half of 2024.
According to InvestingPro data, Citigroup has a market cap of $77.45B and a P/E ratio of 6.35, indicating the bank's financial standing in the market. InvestingPro Tips suggest that Citigroup has been experiencing a declining trend in earnings per share and is quickly burning through cash.
The sale excludes institutional businesses and encompasses clients, assets under management (AUM), and deposits. This decision forms part of Citi's broader wind-down process, which includes the termination of their consumer business in South Korea and Russia that was announced back in December 2022.
Despite this strategic shift, Citibank (China) Co., one of the first global banks to incorporate locally in China in 2007, will continue serving corporate and institutional clients. Over 300 leading local enterprises and many emerging new-economy companies will remain within its client base.
The bank also plans to continue servicing ultra-high net worth Chinese clients via its regional wealth arms, Personal Bank and Citi Private Bank, based in Singapore and Hong Kong. Additionally, Citi has closed sales in eight markets and aims to conclude the sale of its Indonesia consumer business by the end of this year.
On the other hand, HSBC Bank China has seen accelerating revenue growth and consistently increasing earnings per share, as per InvestingPro Tips. This is reflected in the bank's market cap of 151.73B USD and P/E ratio of 6.5, according to InvestingPro data. HSBC aims to absorb affected employees from the deal while Citi Transaction Services (TTS) explores token services for cash management and trade finance.
In line with this new strategy, Citi is also planning an initial public offering (IPO) for its consumer, small business, and middle market banking operations in Mexico. This follows the InvestingPro tip that suggests Citigroup is a prominent player in the Banks industry, despite its recent strategic shifts.
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